Business Ethics News: Governance Overtakes Environment as Top ESG Risk

Governance has displaced the environment at the top of the corporate risk agenda this year, and the speed of AI adoption is widening the gap that ethics and compliance teams are being asked to close.

Governance is now the top ESG reputational risk

A GlobeScan survey reported by ESG Dive finds that governance has overtaken environmental concerns as the leading ESG reputational risk for 2026. Nearly half of business leaders, 45%, named governance as their biggest reputational risk, up from 29% in 2024. Source: ESG Dive.

The AI governance gap is widening

New data summarised by the Thomson Reuters Institute shows companies are adopting AI faster than they are governing it. Around half of firms have disclosed an AI strategy or guidelines, yet significant transparency gaps remain over the ESG impacts of that AI use, leaving boards exposed. Source: Thomson Reuters Institute.

The EU AI Act deadline is close

The regulatory backdrop sharpens this summer: most of the EU AI Act's obligations for high-risk systems, along with the Commission's enforcement powers, apply from 2 August 2026, with penalties reaching up to 35 million euros or 7% of worldwide turnover. Firms selling into the EU should confirm scope now rather than after the deadline. Our EU AI Act compliance checklist sets out the steps.